EVFTA

EVFTA- Promising agreement at highest level commitment that Vietnam has ever had

What is EVFTA?

  • EVFTA is a free trade agreement between The European Union and the Socialist Republic of Vietnam.
  • Time of validation: from the date of entry into force of this Agreement. Starting date is Arrival date of the goods in EU. 

EVFTA’s promising benefits

  • Eliminate or deduct import custom tariffs: import tariff of 99% of export products to Europe will be eliminated or deducted to 0%, maximum within period 8 years on originating goods provided for items in staging category A, B3, B5, B7 when buying Apparel and Clothing products which satisfy 2 conditions: products need to be produced in Vietnam and fabric origin from Vietnam and/or Korea and/or the EU.
  • Custom Duty will be determined by the HS Code of the product. Each HS Code has been classified in the 4 following categories: 

A= Immediately Free / 0%

B3 = shall be removed in 4 equal annual stages / 3% reduction p.a.

B5 = shall be removed in 6 equal annual stages / 2% reduction p.a.

B7 = shall be removed in 8 equal annual stages / 1.5% reduction p.a.

Note: Vietnam exporter can choose the most favorable treatment with lowest custom tariff between different trade agreements such as EVFTA, GSP form A (Generalized System of Preferences),… For example, current import tariff 9.6% for goods has GSP form A (Vietnamese material) will be continued to apply as long as it is lower than the tariff under the EVFTA. 

  • Certification and self-certification: Vietnamese exporters will need government certificates (Certificates of Origin-C/O) or self-certification or EUR.1 certificate for export goods. EU approved Vietnamese exporters can make use of self-certification in case of consignments not exceeding the value of €6000. In the future the EU may move to a system of registered exporters (REX).

EUR.1 is a form used in international commodity traffic. The EUR.1 is most importantly recognized as a certificate of origin in the external trade in legal sense, especially within the framework of several bi – and multilateral agreements of the Pan-European  preference system (the European Union Association Agreement).

EVFTA Process

  • October 2010: Vietnam’s PM and EU’s President agreed to start EVFTA negotiations;
  • 2018: after rounds of negotiation, the European Union (EU) and Vietnam decided to split single text from beginning into 2 texts: EVFTA and IPA (Investment Protection Agreement);
  • 25 June 2019: the European Council approved the content of EVFTA and IPA;
  • 30 June 2019: two texts EVFTA and IPA were signed by EU and Vietnam in Ha Noi, Vietnam;
  • 29-31 October : A delegation from the Parliament’s International Trade (INTA) Committee came to Hanoi, to discuss the FTA/IPA with Vietnamese parliamentarians and government officials;
  • 6-7 November: INTA Committee debate on draft recommendations for consent;
  • 2-3 December: INTA Committee debate on proposed amendments to the recommendations;
  • 20-21 January 2020: INTA Committee vote on the recommendations;
  • 12th-Feb-2020: European Parliament voted on the trade deal and the investment protection agreement in Strasbourg
  • 30th-Mar-2020: EU Council approved EVFTA
  • 8th-June-2020: Vietnam National Assembly deputies officially ratified the Europe-Vietnam Free Trade Agreement (EVFTA) and the Europe-Vietnam Investment Protection Agreement (EVIPA)EVFTA is set to be effective one month after Vietnam and EU have notified each other that legal procedures have been completed.